A Texas Senate Committee travelling the state to discuss property tax reform is hearing loud and clear that accepting Medicaid expansion funding should be part of their strategy, and now they’ve received a response to many of the questions and comments they’ve offered during those hearings.

Medicaid expansion supporters raised the issue at the Committee hearing in Lubbock, in sometimes contentious discussions with Committee members at their Arlington hearing, and most recently brought the issue up at the Committee’s May hearing in Houston. Local Republican leaders in Houston have also called on the Legislature to accept Medicaid expansion in order to reduce pressure on local property taxes.

The Cover Texas Now coalition recently delivered a detailed memo to Committee members to respond to the issues they raised during the hearings.

For example, the memo’s author, Anne Dunkelberg of the Center for Public Policy Priorities, explains that the cost of accepting Medicaid expansion funds and closing the coverage gap for uninsured adults is much lower than one Senator suggested.

Not only that, but the savings and revenue gains from closing the coverage gap would cover most or even all of the costs. The memo notes:

[Former Deputy Comptroller Billy] Hamilton estimated that expansion would increase state revenue by $1.8 billion over the first four years. He also estimated that the state would save $1.2 billion in the first two years of expansion by using federal funds for services that are currently funded either 100% or 40% by the state.

The memo cites the fiscal experience of states that have accepted Medicaid expansion funding:

In Arkansas and Kentucky, two states that have done comprehensive analyses, the budget savings and extra revenue fully offset expansion-related GR costs though at least 2021.

These are direct budget savings. They do not include any economic “multipliers” from more federal revenues, job growth, budget savings for local governments, reduced health insurance premiums, and improved health status of Texans.

On the subject of other states that have expanded Medicaid, a committee member questioned the impact on uncompensated care. The memo explains that Medicaid expansion has helped reduce one of the primary drivers of uncompensated care.

In expansion states, uninsured patient stays in hospitals typically declined by nearly 36.9 percent, while in non-expansion states the decline was slight: 2.9 percent (from 2013 to 2014).

The memo also addresses confusion about the experience of Arizona and other states that expanded Medicaid in the 2000s, before the federal government offered to pay nearly all of the costs. Senators expressed concern that employer-provided health coverage declined after Medicaid expansion. The memo points out employer-based coverage declined in every state except Massachusetts during that time, and the decline in employer coverage in Texas was worse than in Arizona.

Returning to the subject of the uninsured in Texas, a committee member brought up current Medicaid coverage for adults in the state. The memo offers a reminder that the current Texas Medicaid program rarely covers low-income working-age adults unless they are pregnant or have a well-documented disability.

To illustrate, a single mother with two children would have to earn less than $314 a month ($3,768 a year) to remain on Texas Medicaid.

A Senator also brought up the employment status of the adults who would receive health coverage if Texas accepted Medicaid expansion funding. The memo notes that most Texans who would directly benefit from expansion are employed.

An earlier study analyzing U.S. Census and Bureau of Labor Statistics data for Texas by Families USA found that Texas adults below 133% of the federal poverty income and excluded from Medicaid), 58% were themselves workers in sales and retail; food service and restaurants; office and administrative support; construction; transportation; cleaning and maintenance; personal care (barbers, child careworkers, personal attendants); health care aides and assistances; production (e.g., butchers, laundry, tailors), and other jobs. And among the 24% found “not in the workforce,” the primary categories were students, spouses working in the home, adults with a disability, dependents aged 18 to 24, and early retirees.

As state leaders continue to engage in discussions with Texans on this issue, we are confident they will understand the importance of accepting Medicaid expansion funding.

At the Center for Public Policy Priorities, we believe in a Texas that offers everyone the chance to compete and succeed in life. We envision a Texas where everyone is healthy, well-educated, and financially secure. We want the best Texas - a proud state that sets the bar nationally by expanding opportunity for all.
CPPP is an independent public policy organization that uses data and analysis to advocate for solutions that enable Texans of all backgrounds
to reach their full potential. We dare Texas to be the best state for
hard-working people and their families.